The first week of September was not a good one for the cryptocurrency industry around the world. Reportedly, the week saw the lowest volume of global peer-to-peer trade recorded on Localbitcoins. The lull has spread across the Localbitcoins markets with only a handful of markets reporting trading volume to be as they had experienced in the preceding weeks. With only 864 Bitcoin (BTC) traded, this marks the lowest ebb in the past five years. Previously, the first week of trading on Localbitcoins, March 16 2013 held the record for the lowest volume with only 1,995 BTC exchanged. The drop recently could spell trouble for the industry – but what does it mean for the other exchanges?
What Happened to Cryptocurrency Trading in South Africa?
South Africa was one of the nations hit by the drop in Bitcoin trading. The financial market for cryptocurrency exchanges in South Africa was fairly strong before, with the emerging markets in West Africa especially offering promise as many more people had internet access than a bank account, meaning economic transactions could be made through cryptocurrency. 83 BTC were traded in South Africa on the first week of September, while the following weeks saw a return to form with September 8, 2018, reporting 118 BTC, which is closer to the average since mid-2017. But, the following week also saw a slump with 87 BTC traded. The week of September 22, 2018, saw a return to form once again with 107 BTC. But what does this lull mean? Globally, the Localbitcoins BTC trades have returned to form, averaging around the high 7000 – low 8000 mark.
What Does This Mean for Other Exchanges Competing in South Africa?
As Localbitcoins is just one exchange in which Bitcoin and other cryptocurrencies can be traded in South Africa, isolated results lean more towards the platform than the industry. Fellow trading platform Paxful has a lower average trading volume than Localbitcoins, but still posted a slight decline the first week of September globally. While the weeks surrounding it were mid in the 2000s, the first week was low 2000s in terms of BTC traded. Bisq, similarly, traded 20.40 BTC in the first week of September, while just two weeks later reported 114.16 BTC. The slump isn’t just for one platform, but for platforms on the whole, which shows that something about the industry was affected and not just one exchange. The bouncing back across the board shows that the exchanges in South Africa continue to proliferate the trading of cryptocurrency in the region.
The nature of Bitcoin and cryptocurrency means that there will be ebbs and flows that sometimes can’t be mitigated against due to the volatile nature of the industry. Low points come with the territory and soon enough afterwards, the market bounces back to its average. Exchanges are designed for trade volume to peak and trough, so have procedures in place for the outlying blip that may occur. Cryptocurrency, in general, is still as buoyant as ever.